Tax Withholding
Income tax your employer or plan sends to the IRS on your behalf throughout the year.
Withholding is the prepayment of income tax taken out of your paycheck (or retirement distributions) and sent to the IRS during the year. It's calibrated by the W-4 form you file with your employer. Get it roughly right and you owe little or get a small refund at tax time; get it wrong and you face a big bill or a large refund (an interest-free loan to the government).
Retirees have to manage this actively, since there's no employer doing it automatically. Withholding on retirement distributions, or making quarterly estimated payments, keeps you from an underpayment penalty — especially important in years with conversions, large gains, or self-employment income.
This definition is general information to help you understand a term, not financial, tax, or legal advice. Figures that change year to year (limits, thresholds, rates) should be confirmed against current official sources. For guidance on your situation, a licensed fee-only fiduciary is the right next step.